Companies using SAP Business One for their production have to create BOMs and production orders, manage goods issues and goods receipts and so on. With SAP Business One, all functions are implemented to create BOMs for sales, assembly, template and production, then convert these BOMs into production orders and retrieve finished goods from inventory - while removing the raw components. There are methods
Convert sales orders and quotes to production orders without having to enter them manually. All reports are also available to update BOMs, prices and items in batches and to verify that the items are set up correctly.

The production process in SAP Business One

Production in SAP Business One
Production process SAP Business One

Like the other components of SAP Business One, the production module is also strongly integrated into the overall solution.

  • The material requirements plan specifies production orders for production and operates the procurement and reservation of the necessary components.
  • Inflows from production and outflows to production are recorded in inventory management and financial management.
  • Both finished products and components can be serial numbers or managed in batches.
  • Production orders can be linked to both the SAP Business One financial projects and the organizational projects.

BOMs in SAP Business One production

The BOM is the basis for the production module and forms the basis for production orders. But SAP, the parts list is also used to map similar requirements that do not lead to a production order. All BOMs consist of a parent item and one or more child items. The parent item is the finished product and the child item can be either a raw component or a finished product.

Connection plan SAP Business One

BOM Types: Sales BOM

SAP Business One manages four types of BOMs. The sales BOM can only be created for parent items (items that are to be sold). The parent item must be a non-inventoried item and should be marked as a sale item in the item master data. Child items can be marked as either inventory items or sale items. When the parent item is entered in the sales document, all child items are listed to check for inventory. This type of BOM is useful when you want customers to see the aggregated details of the order. Pricing in a sales BOM is used to determine the sales price to the customer. The gross profit is determined at the lower level.

BOM Types: Assembly BOM

The assembly BOM is like the sales BOM, except that in the marketing documents, the only item listed is the parent item. You use this type of BOM when you don't need to see details about the bundled items. Pricing in an assembly BOM is used to determine prices for customers. Gross profit is calculated at the parent level by summing up the child items.

BOM Types: Template BOM

The template BOM has no restrictions on the type of items that
can be entered. It can be a sale, purchase, or stock item, or any combination of the three. A reference BOM can be used with both sales and purchasing documents. If the parent item is used in a sales document, one can make any necessary changes to items or quantities. A template BOM is useful when you want a customer to see what items are included in the package. Pricing in a template BOM is used to determine the prices for the customer. Gross profit is calculated at the parent level by summing up the child items.

BOM Types: Production BOM

Finally, production BOMs are used when a production order is required. The parent item is a finished good and the child items are component items. The production BOM serves as a guide for the production area on how the product to be manufactured is to be manufactured.

The cost of the component items listed in the item master is used to determine the finished cost of the parent item. Labor and overhead costs can add up to a
Production BOM can be added as a standard cost item. The gross profit is based on the
Article level calculated. Only the parent items are listed in the sales documents. The parent items are all included in the MRP run. Variants of the production BOM can be created by selecting the option "Special" or "Disassembly" instead of the order type Standard.

BOM Types: Production BOM / Disassembly

A production BOM can also be used in a production order for a
A reverse process can be used by defining the production order as the disassembly type. As a result, an end product becomes a number of individual parts. It does not matter whether a process is a reversal of a previously performed manufacturing process or whether the central requirement of the manufacturing process is disassembly.

Resource usage in the BOM

Resources allow working times or machine times to be included in the BOM. The main concern is to track the utilization of resources and to get information about availability.
Since resource consumption is measured in units of time, they are the basis for determining the production time (lead time) of a finished product.

The production order

A production order is a set of instructions for the production department to plan
and manufacture of a finished product. A production order is used to track all costs associated with the production process, including resources such as labor.
SAP Business One provides several ways to transfer triggers from requirements to production orders.


Various methods are available to generate production orders.

  • Production orders can be manually linked to a sales order. The necessary components are not procured automatically.
  • The generation takes place directly from the customer order or the offer. The trigger is a corresponding default in the order or offer.
  • Several demand triggers can be combined into one production order using the procurement assistant.
  • The production order is generated via material requirements planning, which means that the MRP assistant can be used to determine whether the triggers for requirements contain finished products.
  • Material procurement or production is also triggered via the material requirements planning module by comparing current stock levels with reorder levels.
  • In addition, several customer orders can be combined into one production order

Production orders can be scheduled and released. After a production order is approved, parts (items and resources) can be issued for production. Components can be issued manually or using the backflush method.

With the backflush method, after a ?receipt from production? created
been issued, the items are automatically issued for production. With the manual output method, you can output the components exactly as needed in the production process. You can also issue a partial amount. The notification of completion triggers the inclusion of the finished product in inventory. The backflushed components are automatically output.

Production order with routing

Route stages structure the BOM. They summarize the articles, resources and texts below them up to the next route section and thus allow easy regrouping of
BOM parts.

A routed production order is based on a routed BOM and consists of stages.

Production order SAP Business One
  • Each stage can contain multiple component lines and various stage-level production calculations.
  • The method of calculating the routing datum:
    Can set date dependencies between the different sections and update the dates for the sections accordingly
  • Can define resource capacity allocation according to that for the resource
  • Set single run capacity

SAP Business One production reports

BOM report SAP Business One

The BOM report checks multiple BOMs at once. After opening the BOM report, you get a list of all available BOMs of the production based on the previously selected filters. By clicking the Expand button on the report screen, one can drill down into the data associated with each BOM.

A list of all open production orders can be generated via the “Open Items” report. Each of these orders can be controlled individually via the integration.





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